Trade union’s Deliveroo judicial review challenge fails

05 December 2018

The High Court (“HC”) has dismissed a judicial review challenge to a finding by the Central Arbitration Committee (“CAC”) that Deliveroo riders are not “workers”. The HC ruled that the riders are not in an “employment relationship” for the purposes of European law.

Background

In November 2017, the CAC rejected an application from the Independent Workers Union of Great Britain (“IWGB”) for collective bargaining rights in respect of Deliveroo riders. The CAC ruled that Deliveroo riders are not “workers” within the meaning of the relevant definition (in section 296 of the Trade Union and Labour Relations (Consolidation) Act 1992). An individual is a worker if he or she works, or normally works or seeks to work:

(a) under a contract of employment; or

(b) under any other contract whereby he or she undertakes to do or perform personally any work or services for another party to the contract who is not a professional client of his or hers.

The case turned on the “limb (b)” worker definition. Deliveroo was successful because the CAC found that Deliveroo riders had a genuine right to use a substitute to perform deliveries - a right which was inherently incompatible with an obligation to provide personal service. This decision meant that the IWGB could not proceed with its application for compulsory recognition in respect of a group of riders in Camden and Kentish Town.

IWGB sought permission to proceed with a judicial review of the CAC’s ruling on five grounds, all but one of which the HC rejected. It allowed the challenge to proceed “with some hesitation” on a single ground – namely, that the CAC had not dealt properly with the IWGB’s secondary submission on the effect of collective bargaining rights in Article 11 of the European Convention on Human Rights (“ECHR”). IWGB contended that the definition of worker in section 296 and the obligation of personal performance should be interpreted in a way that did not exclude riders from exercising their Article 11 rights.

What has the High Court decided?

Following a full hearing on this issue, the HC has now dismissed the IWGB’s challenge. The main points of its judgment were as follows:

Article 11 of the ECHR was not engaged. The case law of the European Court of Human Rights did not support the union’s submissions that Deliveroo riders were workers in the particular circumstances of this case. Specifically, the riders were not in an “employment relationship” with Deliveroo for the purposes of domestic or European law;

Even if Article 11 had been engaged, the interference with the riders’ rights would have been justified. Restrictions are permitted where they are “necessary in a democratic society… for the protection of the rights and freedoms of others”. In this case, the restriction was rationally connected to the objective of preserving freedom of business and contract, by limiting the cases in which the burden of collective bargaining should apply.

The definition of “worker” achieved a fair balance between competing interests. The interference with rights was limited, as it did not prevent riders from joining unions or making voluntary arrangements. It merely precluded them from making use of the UK’s legal mechanism for compulsory union recognition. In this regard, the HC noted that the three matters covered by collective bargaining, and for which compulsory collective bargaining could be enforced, were “pay, hours and holiday”. Hours and holiday had no real significance where (as here) there was no obligation to work personally, while discussion of pay was limited by the absence of such an obligation.

Even if this was wrong, section 296 could not be “read down” in the way the union contended. The IWGB argued that “normally works” should be read as meaning that the workforce did normally work personally, as opposed to what the contract permitted. Rejecting this, the HC said the question was whether the contract under which the individual “normally worked” contained a personal work obligation - and it did not.

The HC also rejected the IWGB’s argument that it could adopt a “dominant feature” test, drawing on the Supreme Court’s judgment in the Pimlico Plumbers case. That decision had made clear that personal obligation was the “sole test”, which could not be usurped by a “dominant feature” test. It was also not possible to achieve the outcome the union argued for by reading the words “or otherwise” into the section 296 test. That would achieve the opposite meaning from that intended by Parliament: each option the IWGB contended for was inconsistent with the “underlying thrust” of the provision.

Implications

Although permission for judicial review had been granted on very limited grounds, the judgment provides important guidance on what constitutes an “employment relationship” in the context of European human rights law. It emphatically endorses Deliveroo’s position that riders are genuinely self-employed, and puts to rest any suggestion that, following the Pimlico Plumbers ruling, the correct test for determining whether someone is a worker is anything other than whether they have an obligation to work personally.

The HC made clear that cases such as these are fact specific, and there are not necessarily any wider implications for other “gig economy” companies given the wide variety of different operating models. Nonetheless, this is an important development in the burgeoning debate over regulation in this area with the Government’s formal response to its consultations following the Taylor Review expected soon. Deliveroo remains the only “gig economy” company to have been successful in any of the recent spate of employment status cases.